Granulocytes and Macrophages (GM) are important cellular components in inflammation. The bone marrow (BM) contains stem cells which under the control of the lymphokines designated colony stimulating factors (CSF) proliferate and differentiate into mature GM. In a previous report we showed that murine BM cells when stimuated simultaneously with tumor promoting phorbol esters (TPA) and bacterial lipopolysaccharides (LPS) produce their own CSF. In the present studies we characterized the BM cells which responded to TPA and LPS in generating CSF and also identified the subclasses of CSF produced under these conditiosns. CSF was quantitated by measuring 3H-TDR incorporated into the DNA of a CSF dependent basophil/mast cell line PT 18. Only BM cells adherent to polystyrene coated with goat and anti mouse immunoglobulin (Ig) antibodies generated CSF suggesting tat cells with receptors for Ig (B-lymphocytes) and/or Fc (GM) are involved in generation of CSF. We next identified the subclasses of CSF produced by the BM (M-CSF, G-CSF, GM-CSF and multi-CSF). M-CSF was excluded since the BM-CSF was sensitive to trypsin digestion while M-CSF is resistant. Multi-CSF was excluded since DA-1 cells, which respond to multi-CSF but not to GM-CSF, did not respond to BM-CSF. BM-CSF induced differentiation in M1 myeloid leukemic cells which respond only to G-CSF. Thus, BM-CSF contains GM-CSF and G-CSF. Receptor triggering by agonist is followed by inositol phospholipid breakdown to diacylglycerol (DAG) and inositol triphosphate (InsP3). DAG activates protein kinase-C (PK-C) and it can be replaced by TPA. InsP3 is responsible for Ca+2 mobilization and can be replaced by Ca+2 ionophores. To determine whether generation of BM-CSF requires activation of PK-C and Ca+2 mobilization we tested the ability of A23187 (Ca+2 ionophore) to replace LPS and DAG to replace TPA. A23187 and TPA acted cooperatively to stimulate the generation of CSF. Trimethoxybenzoate (TMB-8) an inhibitor of Ca+2 mobilization inhibited stimulation of CSF production either by TPA and LPS or by TPA and A23187. DAG could replace TPA in cooperating with A23187 to stimulate the generation of CSF. Thus, activation of PK-C and Ca+2 mobilization are probably early signals in the generation of CSF.